Steven A. Scheck, a former Burger King operator whose 1989 lawsuit against the company helped solidify a franchise legal principle that exists to this day, has died. He was 77.
Scheck was the owner of one of the fast-food chain’s restaurants in Lee, Massachusetts, in 1989 when Marriott Corp. bought a nearby Howard Johnson location and converted it into a Burger King, with support from the franchisor.
In the process, Marriott opened a location that competed with the one Scheck had operated. Scheck sued, saying that his location lost $300,000 in annual sales as a result of the new restaurant.
Scheck’s franchise agreement, however, did not provide him with exclusive territory.
Steven Scheck | Photo courtesy of Zarco Einhorn Salkowski
Robert Zarco, his attorney, argued that the absence of that exclusivity did not give the franchise unlimited discretion to take steps that would hurt franchisees, noting that there was an “implied covenant of good faith and fair dealing.”
U.S. District Judge William Hoeveler ultimately refused to grand summary judgment in the case on that point in 1992. He bought Zarco’s argument that, though Scheck did not have an exclusive territory, Burger King did not have the right to open nearby locations that would affect his operations.
While a judge in a later case questioned the decision’s logic, it nevertheless gave franchisees a powerful legal weapon in disputes with franchisors. In the years since, franchisors have added more detail in their franchise agreements.
“My dad was never afraid to stand up for what he believed was right,” Hayley Scheck Antonian, Steven’s daughter, said in a statement. “He was an entrepreneur at heart, and he believed deeply in his businesses and the people he trusted.”
Zarco, the founder and managing partner of the Miami-based law firm Zarco Einhorn Salkowski, called Scheck “a wonderful human being.” “The franchise community respected him greatly for standing up for what he believed and not living in fear of retaliation.”
